Mediation Effect of Foreign Direct Investment through Trade Liberalization on economic growth in Asian countries.

The majority of economists agree with the fact that trade freedom and economic development are strongly and favourably correlated. The goal of trade freedom is to help economies reach their macroeconomic objectives, particularly strong economic growth. Many nations now understand how crucial it is to draw in foreign direct investment (FDI) in order to boost economic growth and revitalisation. This has provided signals to many countries to work on developing favourable conditions to promote FDI, and identifying the key determinants of FDI becomes a very crucial task for the policymakers. Moreover, the role of governance has gained more attention nowadays, and many investors around the world are now looking for a better and safer business environment for their investments. In view of this fact, the author investigates the effect of trade liberalisation and foreign direct investment (FDI) on economic growth across 48 Asian countries by using the annual data set from 2000 to 2022. Regressed using the following methods: Fixed Effects model by objective approach to analyse the data. The main objective is to examine the relationship between trade liberalisation and FDI inflows and economic growth in Asian countries. The result indicates an indirect effect. lnTLlnFDI demonstrates a positive and significant relationship between trade liberalisation and foreign direct investment (FDI) in their combined effect on economic output (lnGDP). The author's findings provide important insights into the relationship between trade, FDI, and economic growth in Asian countries. These results also have important implications for policymakers in designing and implementing effective trade and investment policies for sustained and inclusive economic development across the region.